Biotech firm KeraNetics shows off new space in Innovation Quarter

KeraNetics LLC, a Winston-Salem biotechnology company, is in the midst of a pivotal transition from focusing on research and development of therapeutic products to being a manufacturer.

A major part of that shift was put on display Monday – a 9,000-square-foot facility in Wake Forest Innovation Quarter that more than doubles its previous space.

KeraNetics is a biomaterials company with 23 employees, including eight with doctorate degrees.

It is using keratin, which is found in hair, nails and skin, in four areas: trauma applications for the healing of wounds; burns and resuscitation fluids; bone and nerve regeneration; and cell growth. Keratin can be formulated into several different commercial products, such as topical gels, putties and rigid scaffolds.

The new space in 200 E. First St. includes laboratory and manufacturing areas that once belong to Targacept Inc., which has downsized drastically the past three years. A $250,000 small-business research loan from the N.C. Biotechnology Center helped pay for much of the upgrade.

“We feel very lucky to have this space become available to us,” said Kim Westmoreland, chief executive of KeraNetics. “The space perfectly fits our needs for the next decade with not a lot of additional expense. It is the right place at the right time.”

Westmoreland said the company is wasting little time putting the new space to use.

“We’re turning the equipment on next week,” he said. “We’re pleased to be able to stay downtown because it allows us to expand our work, particularly on projects with the university. The space perfectly fits our needs.”

KeraNetics has two main business lines: KeraStat concentrates on thermal burns, such as from radiation exposure, and antibiotic drug delivery and KeraGenics focuses on bone, muscle and nerve regeneration, with bone the lead product.

Westmoreland said he believes in a “just in time” business model, in part to control costs.

For example, Westmoreland said KeraNetics can produce keratins for both products on one manufacturing line.

However, the new space gives it the ability to operate two lines, which would reduce the down time necessary to switch production.

KeraNetics is in the process of requesting Food and Drug Administration approval to begin human clinical trials. Westmoreland said that if it gains FDA approval, it could have product available for consumers at the earliest in late 2016 and the latest by early 2018.

“When these products get to market, we believe they will make a big impact,” Westmoreland said.

Sharon Decker, who is stepping down as state Commerce secretary at year’s end, cited KeraNetics as the kind of grassroots biotechnology companies “that are critical important to the economic future of Winston-Salem and North Carolina.”

Decker said one area where North Carolina “can do better” is in terms of technology transfer, in particular commercializing research and development. Wake Forest Innovations debuted in December 2012 to give a higher profile to the commercializing of its academic and clinical research by creating a new division.

KeraNetics is a Wake Forest spinoff. It holds an exclusive license agreement for nine issued and four pending U.S. patents. It also has five internally derived pending patent applications.

KeraNetics has been awarded a combined $15.2 million in grant funding from the U.S. Defense Department and has attracted $13 million in private-equity funding.

The company recently received a $1.5 million federal defense grant for research related to injectable bone regeneration products, and a separate $1 million federal defense grant for 3-D printed dressing to treat severe facial thermal burn injuries.